The Securities and Exchange Commission warned the public against unregistered online lending companies that are operating through popular social media websites.
The SEC said in an advisory that several unregistered online lending companies were luring the public through popular and free social media such as Facebook, Twitter and Linkedln to borrow funds for their financial needs.
The regulator said under the scheme, borrowers would be asked to provide general and personal information. Thereafter, they would be required to deposit certain amount of money as “processing fee.”
The SEC said after depositing the money, the companies would close all communication threads with the borrowers and delete all negative comments against them.
Some lending companies are even using fake or inexistent address in their profile to make the websites appear legitimate and valid, it said.
“The SEC is the lead government agency that supervises and regulates lending companies. As such, all companies engaged in the granting of loans must be registered with the commission and issued a certificate of authority to operate as a lending company,” the corporate regulator said.
“Otherwise, they may be held administratively and criminally liable pursuant to The Lending Company Regulation Act of 2007 or Republic Act No. 9474,” it said.
Among the fines are payment of not less than P10,000 and not more than P50,000 or imprisonment of not less than six months but not more than 10 years or both.
“As a precautionary measure, the public is hereby advised to exercise prudence in dealing with online lenders by checking with the commission if they are registered and have a certificate of authority to operate as a lending company. Anyone who is desperately looking for money could be easily maneuvered by these bogus or pseudo lending companies,” the SEC said.
The SEC said that since the start of the year, it had implemented a crackdown against unregistered informal lenders that were charging exorbitant fees on borrowers.
The SEC said it revoked the primary licenses of 1,248 lending companies as of July 4. The number is expected to increase as more entities are currently being reviewed and monitored, it said.
